To furnish or not to furnish. That is the question. Shakespeare paraphrasing aside, this is an important question for rental property owners. When it comes to buying rental properties, one important factor to consider is furnishing your rental property. Is it worth the investment? The answer is not a simple yes or no because it actually depends on a number of factors, most specifically what kind of property you're renting out. When you are listing a short-term rental home, furnishing makes sense. In fact, it's required. People moving into your home for just a few nights or even a few weeks will need somewhere to sleep, eat, and relax. Even a short-term rental of up to six months can probably benefit from being offered furnished. For long-term rentals, however, you don't want to furnish your rental property in most cases. Tenants will want to move in with their own furniture and belongings. As professional property managers in Philadelphia, we have worked with both furnished and unfurnished homes. We understand the benefits and the challenges of offering a furnished home, and we're sharing some of the most important considerations with you today.
When To Invest in Furnishing Your Rental
You'll want to provide furniture in your rental property when you're renting it out on a short-term basis. Typically, the tenants or the guests who stay in your property will expect to check in and find everything they would find at a hotel. This includes:
- Beds and bedding
- Dressers and closet space
- Kitchen table and chairs
- Sofas and chairs in the common areas
- Appliances (everything from washers and dryers to small appliances like toasters and coffee makers)
- Patio or outdoor furniture
Who are the tenants you're trying to attract? If you're targeting people who are in town for business or work, you want to provide a furnished rental. Whether they're staying for one week or six months, the tenants moving in will not want to move in with furniture. They'll want all the conveniences of a home away from home, but without moving trucks and design decisions.
Attracts Higher-Quality Tenants with High-End Furnishings
When you do decide to furnish your rental property, make sure you're investing in quality. Furnishing your Philadelphia rental with nice pieces and attractive amenities may help you attract higher-quality tenants who are looking for a comfortable and fully equipped place to live. By investing in quality furniture and appliances, you can create a welcoming and modern environment that appeals to tenants in search of a higher standard of living. Additionally, fully furnished rental properties are much more attractive to international tenants and students who may not have the resources or time to buy their own furniture. Apart from attracting higher quality tenants, furnishing your short-term rental property can increase your rental income. By providing a fully furnished rental property that has attractive and comfortable furnishings, you have the opportunity to charge a higher per-night rental rate as tenants are willing to pay extra for a well-appointed space. This can help you cover the cost of the initial investment and generate a higher return on your investment.
When NOT to Invest in Rental Property Furnishings
Standard long-term rental contracts are generally offering unfurnished properties. You may be offering appliances inside the rental home. It's normal to have even long-term tenants move into a home that has appliances such as washers and dryers, refrigerators, and stoves/ovens. Those things will be expected, but furniture will only limit your tenant pool. Most of your residents will have their own style and taste; they'll want to choose their own furniture. When you offer furnished rental spaces, you're responsible for repairing and replacing the furniture that you've provided. If a mattress wears out or a table has three broken legs, you'll need to make the necessary repairs and replacements. This will be your financial responsibility, and it comes with a bit of risk. Are you financially prepared to replace beds, dressers, and bookcases?
Determine your Target Market
Decide who you're renting to and how long they'll be in place when you're deciding whether to furnish your rental property. Philadelphia attracts a lot of tourists and visitors as well as students, international business professionals, and traveling nurses. All of these demographics are looking for short-term, furnished vacation homes or short-term rentals. However, there's also a high demand for well-maintained rental homes that offer a year-long lease term. If that's where your focus is, you'll want to forget the furniture and focus on providing a clean, attractive, and empty rental home. Consider your investment goals. What are you hoping to earn? If you're most interested in earning high nightly rents, and you want the flexibility of using the property yourself from time to time, stick with a short-term rental and invest in furniture. If you'd prefer to have a stable investment with the same tenant in place for a year or longer, rent out a home that's empty of personal belongings or furniture. While furnishing your Philadelphia rental property as a short-term rental home may require an initial investment, it is important to consider the benefits that come along with providing exceptional furnishings. You'll be attracting new guests based on the reputation you've established with former guests. By attracting higher-quality tenants, increasing rental income, saving time and money, and targeting the right market, the furniture you include in your short-term property will help you generate a higher return on your real estate investment. However, your long-term properties will need to be left alone. Always be sure to crunch the numbers and consider your target market before determining if this is the right choice for you. We can help you talk through the options. Whether you decide to go with furnished or unfurnished, we can also help you navigate the rental market and make sure the decisions you're making are aligned with your goals. We'd love to be a part of your real estate investment journey. Contact us at Innovate Realty. We work with investors and their properties in the greater Philadelphia metro area as well as the northeast part of the city and in local areas including Bucks, Montgomery, Delaware, Burlington, and Camden counties.
